From: canadarevenueagency1@yahoo.com   
      
   Tax Predictions For 2014 According To "Carnac The Magnificent" : CRA SOTW   
      
   Article by Kim G. C Moody and Roy Berg    
   Moodys Gartner Tax Law LLP    
      
   Toward the end of the year, tax practitioners tend to flood the blogosphere   
   with "last minute tax tips". We prefer to take a different approach because   
   good tax planning shouldn't be "last minute"... it should be done year round.   
   Furthermore, those able    
   to anticipate tax changes are favourably positioned to plan their affairs   
   accordingly, and in a proactive manner. Before Jay Leno introduced his   
   "Headlines" comedy bit and before David Letterman introduced the "Top Ten   
   List", Johnny Carson appeared on    
   stage in an outrageous costume and used his mystical powers of premonition as   
   Carnac the Magnificent. In an ode to the King of Late Night, and with   
   apologies to Ed McMahon, we give you "Carnac the Magnificent" and an assembly   
   of the following tax    
   predictions for 2014.   
      
   1. Canada will implement a tax preparer registration system   
   The Canada Revenue Agency ("CRA") has been musing about bringing a tax   
   preparer system to Canada for some time now. It would appear that its   
   objective is to try to weed out the unsavoury tax preparer and to protect the   
   public. We've written about this    
   before and believe that it is about time for its introduction in Canada. Other   
   countries, such as the United States, have had tax preparer registration   
   systems for quite some time. While the US registration system is currently   
   being challenged in the    
   Courts, most commentators believe that such challenge is only a short term   
   hiccup. What remains unknown is exactly how and when Canada will introduce its   
   registration system. Will tax preparers need to complete exams to be able to   
   get initially    
   registered? Will there be ongoing professional development requirements? This   
   appears to be a closely guarded secret but our prediction is that Canada's   
   registration system will be introduced in concept in 2014. We also predict   
   that Canada's registration    
   system will not be modelled like that of the US. We believe it will initially   
   be simpler. Stay tuned.   
      
   2. Canada will execute an intergovernmental agreement with the US to   
   administer the US's Foreign Account Tax Compliance Act ("FATCA")   
   Canada is home to many US citizens. Such people have very laborious tax filing   
   requirements given the fact that the US is only one of two countries in the   
   world that taxes on a citizenship basis. Can you guess the other one? If you   
   guessed Eritrea, you    
   guessed right! For those of you who need a brush up on Eritrea, more   
   information can be obtained from the font of all knowledge, Wikipedia. Many US   
   citizens resident in Canada have only in recent years become aware of their   
   filing requirements.    
   Accordingly, the prudent non-tax compliant US citizen has been diligent about   
   getting their tax filings caught up. The US has introduced a number of   
   voluntary disclosure programs and a "streamlined" filing procedure in an   
   effort to encourage such people    
   to get back into the system. However, there are also many non-tax compliant US   
   citizens who are "playing ostrich", purposely not filing or doing " quiet   
   disclosures".   
      
   That's what FATCA is about. It is a massively broad piece of US legislation   
   that became law a few years ago. Overly simplified, it imposes US filing   
   obligations on foreign financial institutions and non-financial foreign   
   enterprises. In Canada, there    
   have been a lot of complaints and open musings about whether or not Canada   
   should or can comply (privacy and constitutional issues). However, let's not   
   kid each other... Canada will comply with FATCA. The Department of Finance is   
   currently negotiating an    
   intergovernmental agreement with the US regarding how Canada will comply with   
   FATCA. Expect such agreement to be completed soon with implementing   
   legislation to be introduced to Parliament shortly thereafter.   
      
   Regardless of what you think about FATCA, all right-minded people will agree   
   on two things: First, Canada must implement an intergovernmental agreement   
   with the US because without doing so, Canadian banks and other businesses will   
   be placed in the    
   unenviable position of being forced to deal directly with the IRS on its   
   implementation.   
      
   Second, Canada can't afford to be exempted from FATCA's reach. One of the   
   purposes of FATCA is to force transparency in the banking system and,   
   ostensibly, catch bad actors. If the US were to exempt Canada from FATCA   
   (which it would never do) all the bad    
   actors FATCA was designed to catch would flock to Canadian banks and   
   businesses.   
      
   FATCA is scheduled to become effective July 1, 2014 although there have been a   
   lot of people requesting that the US delay the implementation date to 2015 or   
   later. Our prediction is that FATCA will not be delayed. Accordingly, time is   
   running out for the    
   non-compliant US citizen. In fact, the IRS openly mused recently that once   
   FATCA is implemented that perhaps their voluntary disclosure programs may be   
   redundant. Wow... non-tax compliant US citizens and their advisors need to be   
   ready.   
      
   3. A tax designation is coming to Canada   
   Some countries around the world offer a credible and recognized tax   
   designation for certain qualified persons who specialize in advising on tax   
   matters. For example, the UK (and now a number of other countries) offer the   
   Chartered Tax Advisor ("CTA")    
   designation through the Chartered Institute of Taxation. Last week, the   
   Canadian Tax Foundation sent a note out to its members giving them advanced   
   notice that in early January 2014 it would be polling its members to get their   
   views on whether or not a    
   specialized tax designation has a place in Canada. This is not a new topic.   
   For example, the Canadian Institute of Chartered Accountants studied such a   
   topic approximately 12 years ago but ultimately abandoned it. A lot has   
   happened in the last 12 years    
   though, and it appears that some stakeholders are studying it again. With the   
   pending merger of the accounting profession into one body under the Chartered   
   Professional Accountant ("CPA") brand, this also adds an interesting element.   
   For Canadian tax    
   specialists who believe that a separate designation has more pros than cons,   
   2014 will be an interesting year.   
      
   4. Intellectually disingenuous debate on the morality of tax avoidance will   
   linger   
      
   [continued in next message]   
      
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